"There have been negotiations underway between the Commonwealth and Victoria over the last week," Mr Rudd told reporters in Brisbane this morning.

"As of this morning, we have reached agreement. Victoria will now sign up to the Better Schools plan for Australia.

"That is a good outcome for the school kids of Australia, the school kids of Australia, the school kids of Victoria."

Speaking in Melbourne after Mr Rudd's announcement, Mr Shorten said the deal would ensure students have access to resources like textbooks and computers.

"Students attending government schools in Victoria will see an extra $6.8 billion from the Commonwealth and an extra $5.4 billion from the state of Victoria - a total of $12.2 billion in extra money flowing through in the next six years to every government school in Victoria," he said.

"We would call upon those states and territory administrations who are holding out, who perceive some fear of a Canberra power grab, to understand that people across the political divide - including my Liberal counterparts - have looked at what Federal Labor has [done] and said 'we want to be part of this'."

Victorian Premier Denis Napthine says there was pressure from both sides of politics to sign up to the plan.

"We wanted to get the best funding deal for Victorian schools, but we also wanted to make sure that we had the best management of Victorian schools with local management by principals and school councils," he said.

"There was a fair bit of argument, a fair bit of argy-bargy, particularly over the last 24-48 hours.

"Negotiating with Bill Shorten, an experienced union negotiator, was tough.

"We believe we were arguing on the right side for good financial outcomes and good management outcomes for schools and I'm glad the Federal Government has listened."

"Kevin Rudd and I are on an absolute unity ticket when it comes to school funding," he said.

The president of the Victorian Association of State Secondary Principals, Frank Sal, says he is relieved the state and federal governments have managed to reach an agreement.

"This funding deal is just so far beyond anything that the Opposition threw in over the last couple of days, in terms of the money that will come to schools, the needs of students that are being addressed, the transparency associated with that," he said.

"All of that is pivotal if we're going to have a really good education system in Victoria."

Queensland Education Minister John-Paul Langbroek says he is prepared to sign up if his state gets the same deal as Victoria.

"The interesting aspect we've had today from the Federal Government is the concession about the bureaucracy, about not getting involved in our schools and acknowledging that Queensland runs its own schools system," he said.

"That's been a non-negotiable from Queensland from the start."

Western Australia joins DisabilityCare Australia scheme

Mr Rudd also revealed this morning that his Government had reached an agreement with Western Australia over the national disability insurance scheme, now known as DisabilityCare Australia.

Mr Rudd said there would be two "pilot projects" held in Western Australia.

"In long negotiations over the weekend, we've concluded an agreement with Western Australia," he said.

"I spoke to Premier [Colin] Barnett last night... and WA is now going to participate in the DisabilityCare Australia scheme.

"There are unique features to the WA scheme but I think it will be good for everybody."

Mr Barnett says Western Australia's deal is unique because one of the pilot projects will be based on the Commonwealth's NDIS model, while the other will be a continuation of the existing state model know as My Way.

"I think this is important, it means now WA is part of it," he said.

"I've always said that I wanted to reach agreement with the Commonwealth on disability care and services."